Questions for Etsy Sellers

United States
March 28, 2009 5:07pm CST
I've been told I should try to open up my own Etsy store from folks. Though my origional question was do the things I've made look sellable for a craft fair my friend asked me to make things for. But since they brought up Etsy... I thought I would ask. I understand all the listing fee's & percentages of the sale. But what I was wondering is does anyone actually have this as a "business" or just as someone who sells for a hobby? If that makes any sense... Ya know are you operating as a business with a tax id # & the whole bookkeeping and taxes that go along with it ? or someone who does it as a hobby who under normal circumstances at say a craft fair would sell for "cash only" ? Just wondering how you run things & any advice on the matter.... thanks much
1 person likes this
2 responses
• United States
29 Mar 09
I have a shop on Etsy.com and a couple of smaller shops on a couple other sites. I do have a tax ID because I will sometimes sell at craft fairs and vendors really need to have a tax ID to sell at fairs and shows, or run the risk of being shutdown should the tax man show up. I also look to consign/sell wholesale/rent space, to sell my jewelry in boutiques and gift shops and a taxID is needed for this also. I do claim my all of my sales and expenses on my tax return and I also pay taxes quarterly for all of my in-state sales. Paypal & Etsy fees are fairly easy to track and state taxes are built into the prices of my items (should they sell in state) I don't know how the IRS determines what is a business and what is only a hobby. My tax adviser told me I needed to claim my sales. Basically, he said that if the items are made to be sold for a profit, it is considered a business not a hobby. Should the business lose money three straight years, the IRS may consider it to be a hobby at that point (and the word "may" means- who really knows, IMO)I'll continue to use an adviser to guide me on this matter. But yes, I do run it like a business, with a notebook full to record all in-state sales and sales tax paid by quarter, along with a file containing all order confirmations for all of my purchases.
1 person likes this
• United States
29 Mar 09
See all this tax business is what scares me & makes me wonder if it's worth it ya know? I did not realize @ craft fairs they would require a tax id from you, but it makes sense at the same time too.
1 person likes this
• United States
31 Mar 09
Yes, it is possible that the state may send someone to a show to check for tax ID's. It's really quite simple for state IDs. I filled out a tax form at the state tax site on the net and within 10 business days they had sent me my temporary tax ID. I pay my sales tax quarterly by phone (it can also be done online in the state I live in) Speaking of which, today is the last day of the quarter, so I'll need to get hubby to sit down and figure out my sales tax so I can call them in the next 10 days to pay my bill (it should be a whopping $10...at most...lol)
@busyB4 (875)
• United States
5 Apr 09
Here they ask for a license to sell, not really a tax number. What is so bad too is having to pay taxes to different cities,counties ,etc.. for craft shows. I was told that you did not need a tax number if you sold to a whoelsale place, or it was on consignment and the store owner collects and files the taxes, only if you plan to go retail.
• United States
28 Mar 09
What ever you do with etsy don't forget to open an ecrater.com store as well. There are no fees and I have sold on it a few times. I like etsy.com and I have my bags there as well. But I rather sell crafts where I have them listed for more days and can be re listed if need be. ecrater.com blujay.com I sell for a living to support myself and my child. No I don't have a tax id. I don't find the need for one right now.
• United States
29 Mar 09
I was thinking even craigs list to keep it on a cash only basis as I only make things as I want or need to ya know. I'm glad you are able to support yourself this way. A neighbor when I was growing up she quit her job to do crafting fulltime like when the craft malls were doing well and such she made more crafting than holding down a real job while her kids were in school.
1 person likes this
• Canada
12 Apr 09
I sell on Ebay, etsy, etc. I only sell for cash right now as I'm so small a business and am homebased that to register and have a tax ID is silly. Once I am in it for a year at least and start making more than I spend, then and only then will I bother to get a tax ID. In the meantime, I charge for the product and shipping cost, but I add NO TAX to my listings.